Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd & Ors

Factual and Procedural Background

This judgment concerns a challenge by the Defendants to the jurisdiction of the English court in relation to claims for infringement of UK patents and the determination of a global FRAND (Fair, Reasonable, and Non-Discriminatory) licence. The Claimant, a Luxembourg company owning a global portfolio of patents including standard essential patents (SEPs) in over 40 countries, alleges infringement by the Defendants, who are commercial rivals manufacturing and selling mobile devices worldwide. The Defendants dispute the validity or essentiality of the Claimant's patents and have initiated parallel proceedings in China challenging the validity and infringement of Chinese patents. The Claimant commenced proceedings in England seeking relief including a global FRAND licence determination and FRAND injunctions. The Defendants contest the English court’s jurisdiction, argue that China is the proper forum, and challenge the service of proceedings on the Chinese Defendants.

Legal Issues Presented

1. Whether the English court has jurisdiction to adjudicate claims involving infringement of UK patents and determination of a global FRAND licence that implicates foreign patents.
2. Whether the English court should decline to exercise jurisdiction on grounds of forum non conveniens, with China being the natural forum.
3. Whether the Chinese Defendants have been validly served within the jurisdiction.
4. Whether permission should be granted to serve proceedings out of the jurisdiction on the Chinese Defendants and for substituted service.

Arguments of the Parties

Defendants' Arguments

• The English court lacks jurisdiction to decide claims that essentially concern infringement and validity of foreign patents, particularly Chinese patents, which are disputed.
• China is the natural and appropriate forum for these claims due to the predominance of sales, manufacture, and ongoing Chinese proceedings.
• The Defendants have not been validly served in England.
• The Defendants contend that the relief sought is primarily a global FRAND licence determination, with UK infringement claims serving only as a procedural hook.
• The Defendants offer to submit to a global FRAND determination in China, subject to conditions, and argue that the English court should decline jurisdiction accordingly.
• They challenge the existence of a serious issue to be tried, disputing infringement and essentiality of the patents.

Claimant's Arguments

• The English court has jurisdiction to hear claims for infringement of UK patents and to determine FRAND terms as part of relief for such infringement.
• The Defendants’ justiciability objections fail because the English court does not determine the validity of foreign patents but can consider infringement of UK patents and grant relief accordingly.
• The UK is the appropriate forum for the UK patent infringement claims and associated FRAND issues, especially given the Defendants domiciled in the UK.
• China is not an available alternative forum for determination of a global FRAND licence, as Chinese courts lack jurisdiction to determine FRAND terms for non-Chinese patents without agreement by both parties.
• The Defendants have not been validly served within the jurisdiction.
• There is a serious issue to be tried, supported by evidence of essentiality and infringement of the UK patents.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by affirming the well-established principle that English courts do not have jurisdiction to determine the validity of foreign patents, relying on the Moçambique rule and relevant case law. It recognized the Defendants’ argument that the claims implicate foreign patents, particularly Chinese patents, but held that this did not preclude jurisdiction over UK patent infringement claims or the determination of FRAND terms linked to those UK patents.

The court adopted the reasoning in Unwired Planet that a global FRAND licence determination does not amount to deciding foreign patent validity, as foreign courts retain exclusive jurisdiction over validity issues. The global FRAND licence can incorporate mechanisms to adjust royalties based on foreign validity determinations, preserving the exclusivity of foreign courts and avoiding conflicting decisions.

Regarding forum conveniens, the court applied the principles from Spiliada and VTB Capital, focusing on whether China was a more appropriate forum. It concluded that the UK is the clearly appropriate forum for infringement of UK patents and associated FRAND issues, particularly given that UK domiciled Defendants must be sued in the UK under Owusu. The court found that China is not an available alternative forum for determination of a global FRAND licence or infringement of UK patents, as Chinese courts lack jurisdiction over non-Chinese patents and global FRAND issues absent agreement by both parties.

The court rejected the Defendants’ "Harman fallacy" argument that the relief sought should define the forum, emphasizing the substance of the claims for UK patent infringement. It noted the risk of inconsistent decisions if the UK patents were litigated in China and the UK simultaneously.

On service of proceedings, the court analyzed the evidence regarding whether the Chinese Defendants carry on business in the UK. It concluded that service on related UK subsidiaries or finance entities did not constitute valid service on the Chinese parent companies, as there was no sufficient connection or agency relationship.

Finally, the court granted permission to serve proceedings out of jurisdiction on the Chinese Defendants under appropriate gateways, finding a serious issue to be tried and that the claims relate principally to property within the jurisdiction (the UK patents).

Holding and Implications

The court REJECTED the Defendants’ jurisdictional challenges and applications to stay the proceedings on grounds of justiciability and forum non conveniens. It held that:

• The English court has jurisdiction to hear claims for infringement of UK patents and to determine FRAND terms related thereto, notwithstanding the involvement of foreign patents.
• The UK is the clearly appropriate forum for the claims against the UK domiciled Defendants, and forum non conveniens does not apply to displace jurisdiction.
• The Chinese Defendants have not been validly served within the jurisdiction, but the Claimant is granted permission to serve out of jurisdiction and to effect substituted service.
• The claims will continue in the English courts.

The decision preserves the English court’s role in adjudicating UK patent infringement and associated FRAND licence terms, while recognizing the exclusive jurisdiction of foreign courts over foreign patent validity. It prevents fragmentation of litigation by rejecting arguments that would require separate proceedings for each patent territory and limits the Defendants’ ability to use forum challenges as a "hold-out" strategy. No new precedent was set beyond affirming established principles and their application to the facts of this case.